Competitors try to close down new Israeli Daily

December 23, 2009

Until recently, the Israeli Hebrew media was dominated by three daily newspapers. The most sophisticated daily, Haaretz, known for its far left post-Zionist agenda has a small circulation but is widely read by opinion makers.

But the market has until recently been dominated by two tabloids, Yediot Achronot and Maariv, both of which have a penchant for sensationalism.

Two years ago, a new newspaper appeared on the scene. Yisrael Hayom*. It recruited some of the best journalists, but many predicted that a paper circulated for free which based its income exclusively on advertising would not succeed. All the more so, in an environment when newspapers in Israel and throughout the rest of the world underwent difficulties as the Internet began intruding into their market and the global financial meltdown was making its impact.

But, contrary to expectations, Yisrael Hayom grew from strength to strength and has revolutionized the entire newspaper industry. Already today, it enjoys Israel’s second largest circulation and is likely to overtake the leader Yediot Achronot in the near future.

The paper was launched by US business tycoon Sheldon Adelson, one of the most generous Jewish philanthropists of our time who has distributed unprecedented amounts of money for various social causes in Israel as well as becoming the largest donor to Birthright.

The success of the newspaper is reflected in the fact that both Yediot Achronot and Maariv in desperation approached various parliamentarians beholden to them and attempted to block the newspaper by introducing legislation making it illegal for nonresidents to publish an Israeli daily newspaper.

I include for your interest a translation of a powerful article by Amos Regev, the editor-in-chief of Yisrael Hayom, which appeared in the weekend edition of the newspaper and provides an outline of the seamy aspects of the Israeli media.

The Law for Mozes and Nimrodi

The owners of Yediot Aharonot and Ma’ariv refuse to acknowledge that their monopoly over news, views, and thoughts, is over.

Now they are trying to recruit the Knesset to their aid – at the expense of democracy.

They want to shut our – Israel Hayom – mouths. They want to limit your – the readers’ – freedom of choice. They want to force you to buy only their merchandise.

“They,” that is to say Arnon (Noni) Mozes, the publisher of Yediot Ahronot, and Ofer Nimrodi, the publisher of Ma’ariv. Two people who have grown accustomed to controlling the print media in Israel. Two people so gripped by the drunkenness of power that it seems to them that they are the ones who control the nation. Two people who used their media outlets as if they were weapons created to implement their personal agendas: power, politics, collusion, money.

But one morning they woke up and the world had changed right before their eyes: Israel Hayom arrived, and the public was given an alternative. No more monopoly on thoughts. An honest, fair, and balanced newspaper. A newspaper that never forgets that it is first and foremost Israeli. A newspaper that supports, without compromise, the rule of law.

Those who pull strings

The rule of law? That was the last thing they needed. From his office at the Yediot Ahronot building, behind the scenes, and with the help of covert advisors and pricey attorneys, Noni Mozes pulled strings. To activate politicians, get laws passed, to exalt and to topple. Those who obeyed him were rewarded with sympathetic articles. Those who stood up for what they believed were punished. He befriended the “Sycamore Ranch” club; he protected Olmert; he attempted to save Haim Ramon from his trial; he attempted to help Hirchson, a finance minister convicted of theft. He gives his orders to someone else – always someone else – while he hides there, behind the door, or walks the halls of Yediot, staying close to the walls. He sees no one who is more than a meter away.

And now too, someone else is doing the work for him – it is actually his supposed enemy from the “Wiretaps Affair,” Ofer Nimrodi. Nimrodi stood trial twice for his part in that affair, and was twice convicted on a plea bargain. He confessed to grave violations. Nimrodi served more than two years in jail, all in all. The ethics court of the Israel Press Council ruled at that time that “He is unworthy of inclusion in the press community.” But he is here – and he comes to the gates of the Knesset, so that it may enact a law for him, and for his enemy/friend Noni Mozes, that would save his failing paper.

“Experience teaches that the holder of the controlling interest in a newspaper may have a decisive influence on the quality of the newspaper and its content, including the possibility of continuous and significant influence on the newspaper’s policy…The implication of this is that the owner of the newspaper and the editor of the newspaper have the ability to influence, among other things, the political, financial, and social agenda of the nation,” read the explanatory notes of the bill that Mozes and Nimrodi are striving to pass.

And indeed, they are speaking from experience. These are their frames of reference. This is exactly how they operate within the newspapers that they own: they meddle, influence, and use. They dictate an agenda that is convenient to them and to their business interests. They obstruct investigations of injustice and corruption on the part of those with whom they seek to curry favor; they bombard with negative articles those whom they find inconvenient. Not only do they roam the halls of government – they attempt to determine who will fill the posts of government: the prime minister, the ministers, and the directors-general. Readers are, in most cases, unaware of the “angles” employed, far from their view: a dark connection that is ultimately translated into power, more power.

But now, that is going so well for them. Because their power is based on the assumption that the public has no choice but to read their newspapers. But fewer and fewer people are reading them these days, and the earth is crumbling under their feet. So they go to the Knesset, again with their old tricks, which used to work so well, and which now, thanks to Israel Hayom, no longer do . Because once upon a time, when Noni Mozes wanted to influence the appointment of a justice minister, he succeeded. Now, when he tried to influence the appointment of the attorney general, he failed. The man who saw himself as the real prime minister of Israel – despite the fact that no one cast a single vote for him in the polls – does not believe that this game is over.

A shameful, special-interests law

Freedom of expression is a supreme value in a democratic nation. In Israel, it is secured by the Basic Law of Human Dignity and Liberty. The Knesset is empowered to compromise that freedom only in extreme cases, and the High Court is charged with ensuring that MKs do not make inappropriate use of their power to enact laws. And look at the bill that pertains to the press issue: it is a shameful bill; it serves special interests, it is unprecedented in a democratic state. The bill was created to damage only one newspaper, Israel Hayom.

Sanctimoniously rolling their eyes, its proponents claim that propriety demands that the written press be subject to the same limits that are imposed on electronic media – that is, television and radio. Why? The answer is apparently, “Because I said so,” because there is no justification for that. Electronic journalism operates within circumstances of limited resources, in the form of airwaves that belong to the nation and its citizens. Thus, when setting forth to allocate those resources, the state makes demands and imposes limits on owners of electronic media that are seeking allocations and franchises.

That is not the case with printed journalism: it makes no use of public resources. Journalism is an unlimited resource, and there is no justification for limiting freedom of expression. That is so in every democratic state: anyone who wants to establish a paper, has the right. Anyone who wants to write in a newspaper, has the right. Anyone who wants to read those opinions has a right. As John Stuart Mill – the greatest philosopher of liberalism – wrote, “If all mankind minus one were of one opinion, and only one person were of the contrary opinion, mankind would be no more justified in silencing that one person, than he, if he had the power, would be justified in silencing mankind.”

Israel Hayom serves the principle of freedom of expression and the rights of those who want to write for the newspaper. It is untenable to silence that basic right by law. And if the opinions presented in the newspaper do not suit the owners of Yediot Ahronot and Ma’ariv, that ‘s their problem. They are trying to force upon the public an agenda in which “journalism” has one meaning: publishing what they wish to publish, promoting opinions which they wish to promote, exhalting individuals whom they seek to exhalt, and harming people whom they wish to harm. Fair competition in the market square of freedom of expression? That concerns them not a whit.

Israel Hayom serves the principle of freedom of information for the entire Israeli population. It publishes news items and investigative reports which others may hide or play down. The important, unprecedented, news regarding Attorney General Meni Mazuz’ decision to bring former-prime minister Ehud Olmert to trial, did not appear as the main headline in Yediot Ahronot, but as a tiny, secondary news item, like those which are often devoted to weather reports.

And two months ago in Ma’ariv, owners celebrated their own “Salute,” show to commemorate the 100th anniversary of the mother company Hachsharat Heyeshuv. They devoted an entire page to the event on the day which preceded it; three full pages on the following day; and another two pages, two days later. Why? The explanation might be hidden in the pictures that were printed: Ofer Nimrodi with the owner of the bank that finances Ma’ariv; Ofer Nimrodi with the CEO of that same bank, and the same Ofer Nimrodi with a businessman who is the leading advertiser in his newspaper. Is that important to the public? Not really. Is it important to the financial interests of the Nimrodi family? Safe to assume.

What remains is the issue that the owner, according to the bill, must be a resident of Israel. The Tzadok Commission is quoted in the explanatory notes as saying, “Decisions pertaining to the editorial policy of a newspaper require explicit responsibility…and commitment to the nation, its citizens, and its residents. In keeping with that, the Commission recommended that the editor of a widely distributed newspaper be a permanent resident of Israel.” Excuse me, but I was born in Israel, and have also been living in Ramat Gan for a long time.

Most democratic states around the world do not forbid a foreign resident from becoming the owner of a newspaper. Take Rupert Murdoch, for example: an Australian, who has bought newspapers in all parts of the globe. He was eventually granted American citizenship, and still owns newspapers and television stations around the world.

I am not speaking on behalf of the Adelson family, but anyone who would attempt to harm them should be ashamed. Mr. Sheldon Adelson, a warm-hearted Jew and lover of Israel, and his wife, Dr. Miriam Adelson, have donated of their own capital to wonderful endeavors in Israel: from $100 million to the Taglit-Birthright Israel project to $25 million to the Yad VaShem – Holocaust Martyrs’ and Heroes’ Remembrance Authority, and other causes. Dr. Miriam Adelson is a native Israeli who served in the military, studied medicine in Israel, worked in Israeli hospitals, and runs a drug rehabilitation clinic in Israel, to this day.

So what are Noni Mozes and Ofer Nimrodi complaining about? They are complaining about the loss of their status. Yediot Ahronot’s monopoly permitted him to become a focus of power which has no precedent in a democratic nation. Competitors who arose failed. None of them, by the way, turned to the State or the Knesset to request assistance. Amos Schocken established Hadashot, a paper which was not well-received by the public, and when that failed, he coped with the losses on his own. He now has a partner at Haaretz. Resident abroad, a person from Germany.

And Ofer Nimrodi? After his release from prison, he returned to Ma’ariv. At that time, the newspaper had reached the height of its success since its purchase by the Nimrodi family: a TGI exposure rate of 27 percent and a cash balance of hundreds of millions of shekels (thanks to the generosity of his former partner, Vladimir Gusinsky). But since then and following a series of failing decisions, the newspaper began to plummet to the point of threatened closure. When Gusinsky bought 25 percent of the newspaper, the purchase was based on a value of $340 million. This week, the market value of Ma’ariv on the stock market was some $36 million. Nimrodi failed. So whom does he have to complain about? Who managed the business?

Mr. Nimrodi attempted again and again, during the last three years, to sell the paper to investors – all of them foreign. Guydamak, Patarkatsishvili, Blavatnik. They all examined the business, and failed to buy. Yes, he attempted to sell the newspaper, in its entirety, to Mr.

Adelson, as well. And he did not succeed. Now he wants to forbid by law the ownership of a newspaper by a foreign resident? Is he unfamiliar with the word “hypocrisy”?

Fair competition – absolutely

Patriotism is a lofty term. It is hard to see the newspapers of Mozes and Nimrodi as patriotic, but that may be a matter of taste. Then why do they wave the flag of their Israeli citizenship? Why, based on that logic, do they not demand that foreign residents and venture capital firms be forbidden to purchase control of Bezeq or the banks, or mobile phone and broadband providers, with infrastructures that are critical to the nation? Apparently because they do not compete with Mozes or Nimrodi.

And there is a claim of unfair competition, in that Israel Hayom is a newspaper that is distributed at no cost to readers. Please, take a look at the world: there are newspapers like this in every democratic state. This is a natural outcome of the Internet age. Only recently in London, The Evening News, a newspaper with a 182-year history, announced that it was becoming a newspaper distributed free of charge. Why? Because if the newspaper is good, this financial model succeeds, while newspapers which are not good, fail.

Noni Mozes also published a free newspaper called 24 Dakot – it failed and closed. And Calcalist, another flagging project, is now distributed to at least some of Yediot’s subscribers – at no cost. And handing out a complimentary newspaper at a gas station or a supermarket – was that not the Mozeses’ and Nimrodis’ idea?

Internet websites are, still, free. If a website appears which is more successful than Ynet – will Mozes then try to enact a law in Knesset that forbids competition?

Israel Hayom has no branja [ultra-cool fringe] column and no branja writer because, in our view, and with no lack of respect for the domain in which we are engaged, there is no public justification for dealing in gossip about a handful of people, who, with the exception of a few screen stars, are unfamiliar to the public. But if there is a branja aspect of which we are proud, it is the fact that many fine writers and columnists – people whom places like Yediot Ahronot and Ma’ariv did not want because they have stood up tall against interference by owners – come to us.

It suits Mozes that his most senior writer and winner of the Israel Prize for Communications, Nahum Barnea, appears for duty at Globes, a newspaper whose owner owns stock and is Mozes’s partner in Yediot; and that he attacks our paper and his former colleagues, as if they were not among the same Noni’s stars until they refused to fulfill his dictates.

The bill against us – because we succeeded

Israel Hayom has succeeded thanks to you, the readers. It succeeds because it is an Israeli newspaper. Because it affords expression to the whole spectrum of opinions. Because it is honest, to the point, and a guardian of rule of law. Because it does not assume, as a world view, that Israel is always wrong, and that its enemies are always right. Because we do not threaten, and do not avenge. Look at how Yediot and Ma’ariv compensated the MKs that enlisted on their behalf: their pictures decorate the news pages of both of those papers. That is not our way.

We are not here for them. We are here for the readers. And because we succeeded, they want to enact a law against us. A law which means that an Arabic newspaper in East Jerusalem, whose owners reside in Arab nations, may be published with the Knesset’s approval. But Israel Hayom, an Israeli newspaper, in Hebrew, which now includes a weekend edition, and has a circulation of over a quarter million copies – cannot. We do not believe that this law – which was born in sin – can pass. They will not shut our mouths. We will go on. With you the readers, and for you.

Full disclosure: The writer was employed for 10 years in senior positions at Yediot Ahronot, and for nine years in senior positions at Ma’ariv.

An unconstitutional billDr. Aviad Hacohen

The new bill is utterly suited to the going-out-of-business sale of Israeli democracy. Along with a declaration of war on the High Court, enactment of “Big Brother” laws, and the attempt to enact discriminatory citizenship laws that border on racism, the bill’s authors would impose additional limits on licensure of the press in Israel.

Limits to freedom of the press in Israel, by virtue of British Mandatory law, have no equal in the democratic world. Licensure of the press is an archaic vestige of a dictatorial regime, in which government strives to be the “boss” of freedom of opinion and speech.

To justify the bill, the authors have cited their wish to prevent non-Israeli citizens with special interests from “influencing public opinion on our shores without considering desirable norms in Israel.” Apparently, a secret was revealed to them in a dream – that of “desirable norms in Israel” – and they would attempt to ensure that we all adjust to them. Especially if they serve the commercial and political interests of certain people.

A generation ago, the former-president of the High Court, Justice Moshe Landau, described another pursuit of this type as “government taking hold of the authority to decide what is good for the citizen to know; this ultimately results in it also determining what is good for the citizen to think; and there is no greater contradiction than that to real democracy, which is not ‘guided’ from above.”

According to the proponents’ logic, it may be worth exploiting this opportunity to immediately impose criminal responsibility on anyone who watches CNN broadcasts, and to completely forbid quoting The New York Times in Israeli newspapers, lest, heaven forbid, the threatening opinions in those media outlets, which are controlled by foreign elements, influence the tender souls of Israelis “without considering desirable norms in Israel.”

The sweeping language of the new bill, and the absence of direct linkage between its content and the goal it aims to serve, undermines its constitutionality.

Along with its damage to freedom of expression and freedom of the press – referred to in Israel as the “soul bird of democracy” [democracy’s most vital aspect – the bill also bears grave damage to other constitutional rights, like ownership rights, freedom to conduct business, and contractual freedoms.

“The bill which prevents foreign ownership of the written press in Israel is inappropriate,” the President of the Israel Press Council, retired-High Court Justice Dalia Dorner, said yesterday.

The bill that was placed on the Knesset table on Wednesday, rules that only a citizen of Israel, who resides in Israel, may own the controlling interest in an Israeli newspaper, and that all of the newspaper’s funding must come from Israeli sources. Dorner told Israel Hayom that “the more newspapers that exist, this will be to democracy’s benefit. Heaven forbid that we have only one newspaper. Though there are legal limitations to the ownership of television channels, a written newspaper must not be compared to channels which are required to receive a franchise from the government.”

Dorner added that “if there are people who invest in journalism in Israel, thus adding to the number of newspapers – as long as they conditional obey the laws of the nation – I say, may their numbers increase. Investors will come; the number of media outlets will multiply; and there will be various agendas.”

Nobel Prize laureate Professor Israel Aumann, said yesterday in the Ariel Conference on Law and Media that he “favors extreme freedom of expression. Freedom of expression is one of the pillars of democracy.